Technology-Neutral Versus Technology-Specific Procurement

Abstract An imperfectly informed regulator needs to procure multiple units of some good (e.g., green energy, market liquidity, pollution reduction, land conservation) that can be produced with heterogeneous technologies at various costs. How should she optimally these units? Should run technology-specific or technology-neutral auctions? allow for partial separation across technologies? instead post separate prices each technology? What are the trade-offs involved? We find one size does not fit all: preferred instrument depends on costs available technologies, their degree substitutability, extent information asymmetry and public funds. illustrate use our theory policy analysis an ex ante evaluation Spain’s recent renewable auction.